Zone Startups India, BitStreet and Block Chain University are hosting India’s first bitcoin hackathon at the Bombay Stock Exchange in India named “HackCoin Mumbai.” The hackathon will be joined by over a hundred developers looking to build blockchain-based applications for payments, big data and digital experience.

“There are three problem statements – one for each theme,” explained Ajay Ramasubramanian, project head of Zone Startups India. “There are possibilities for the winning outputs to be rolled out into full-scale projects.”

The hackathon is sponsored by Microsoft, IBM and Citruspay, and the executives of these companies will participate in the event as mentors and panelists.

“What we are really excited about is not only that we are the first fintech hackathon in terms of blockchain usage, but also that we are getting a lot of bitcoin experts,” said Raunaq Vaisoha, partner of HackCoin, the facilitator of the event.

Vaisoha added that such an event is important to developers, especially now that large global banks are showing strong interest in blockchain technology and blockchain/bitcoin-based startups.

“This event is very important for the blockchain ecosystem,” Vaisoha said. “If you look at 2014, there was $400 million VC funding in the blockchain. Citibank, Barclays and IBM are looking at it.”

Ripple Inc., payment gateway for hundreds of assets and digital currencies has announced the closure of btc2ripple gateway for all US residents starting September 1, 2015.

Btc2ripple gateway is one of the hundreds of gateways on the Ripple Trade platform which is used to purchase or trade BTC to XRP (Ripple’s IOU). On September 1, Ripple will shut down the btc2ripple gateway for all U.S. residents, which will disallow any Americans from purchasing or depositing BTC using Ripple Trade accounts.

In a statement, the btc2ripple team announced, “We are discontinuing the btc2ripple service for U.S. residents. All non-U.S. customers will have full access to our service as usual. Starting Sept 1, 2015, you will not be able to make BTC deposits to your Ripple Trade account or make BTC withdrawals from your Ripple Trade account.”

If any U.S.-based accounts hold BTC on or after September 1, all bitcoin will be forfeited.

The majority of Ripple Trade users are based in the United States, and so the closure of btc2ripple may lead to a large decline in bitcoin/xrp trading volume on its platform.

Writing on CIO Journal, a Wall Street Journal blog for corporate technology executives, Owen Jelf and Sigrid Seibold , respectively global managing director of Accenture’s capital markets practice and managing director of Accenture’s digital capital markets efforts, weigh in on the fashionable debate about the blockchain as a system vs. bitcoin as a currency.

Not surprisingly, the two Accenture writers propose to do without bitcoin as a currency, but they are bullish about the potential of the blockchain in financial markets.

“Blockchains present an enormous opportunity for the world’s banks and financial institutions, which have moved quickly to make investments in it,” they say.

Accenture, a Fortune Global 500 company, is the world’s largest consulting firm as measured by revenues and has scores of high profile clients in the banking, financial and regulatory sectors.

“The bitcoin protocol supports a highly decentralized currency validated through anonymous consensus on a public ledger held by entities around the world,” note the Accenture representatives. “But that objective introduced trade-offs, including a costly proof-of-work algorithm, public transaction data and a validation scheme that adds latency to the transaction process, by design.”

Bitcoin enthusiasts would disagree, and argue that the distributed anonymous consensus model used in the Bitcoin blockchain is not a bug, but a feature – and a breakthrough innovation. In fact, the Bitcoin blockchain represents the first solid, working implementation of distributed consensus – for the first time, everyone can agree on what transactions took place, and who owns what, because everything is recorded on a tamper-proof public ledger that doesn’t need a central server and can’t be controlled by any central authority.

Of course, that is precisely the reason why the authorities and the banks don’t like Bitcoin. Today, governments and financial institutions recognize that the blockchain technology behind Bitcoin can offer huge cost savings, efficiency, and operational benefits to financial systems – distributed ledger technology could save banks $15 billion-$20 billion per annum by 2022 according to a recent Santander Innoventures report – but it’s in the nature of power to oppose what it can’t control.

The two Accenture representatives offer their solution: “To be used by financial institutions, including capital markets firms and insurers, blockchains must supplant the costly methods introduced by bitcoin with a mechanism that guarantees security, privacy and speed without paying for anonymous consensus.”

In other words, Bitcoin should disappear and be replaced by a closed blockchain. The new blockchain proposed by the Accenture writers is not “permissionless” like the Bitcoin blockchain, where everyone can download the software and participate without asking anyone’s permission, but a “permissioned” blockchain restricted to vetted participants.

New York Times technology and finance reporter Nathaniel Popper, author of “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money,” noted that a permissioned blockchain could be jointly run by the computers of the largest banks and serve as the backbone for a new, instant payment system without a single point of failure. The new blockchain, decentralized but closed, would offer the benefits of the current Bitcoin network without relying on end-users for its operations.

Of course, the governments and the banks tend to enthusiastically support the idea of a permissioned blockchain without the troublesome bitcoin. But the Bitcoin system works, and the features that the Accenture writers propose to eliminate could be the very features that make it work. Other solutions to the issues mentioned by the Accenture writers, for example Lightning Networks, could be more effective.

One of the strengths of Ethereum is its decentralized nature, giving it a wider, more stable base. There are Ethereum project teams in different parts of the world, including Amsterdam, Berlin, Switzerland and Brazil. (For example, Geth was deployed by the Amsterdam team while Eth was produced by the Berlin team.)

If there is a center to Ethereum, it would be in the beautiful town of Zug, Switzerland, home of the Ethereum Foundation that overseas the project’s finances, manages the funds raised in the Ether sale and determines the long-term vision and direction of Ethereum.

Stephan Tual, chief communications officer for the Ethereum project, told Bitcoin Magazine that the new executive director and board members represent a fresh start, a way to reboot the organization.

“[W]e had a very clear goal to recruit from verticals that were varied, ranging from the world of manufacturing, IoT, education, politics, health, finance and more,” he said. “Basically, anywhere where Ethereum could be embedded and make a difference.”

The new foundation executive director is Ming Chan, a Swiss-born Chinese American MIT computer science and media arts graduate, who has extensive experience working with educators, scientists and inventors to found and grow innovative new business ventures.

The new board members are Vitalik Buterin (president of the board), Lars Klawitter, Vadim Levitin, and Wayne Hennessy-Barrett.

For day-to-day decisions an “executive” consisting of Stephan Tual, Gavin Wood and Jeffrey Wilcke is in charge, with assistance from Aeron Buchanan, Jutta Steiner, Kelley Becker and Frithjof Weinert.

How’s the Launch Going So Far?

The launch so far is going far better than expected. The main Ethereum blockchain is in play and already users can access their pre-sale wallets, mine ether at the full reward rate, and use or deploy decentralized applications on the main network.

“We’re delighted with the stability of the network so far, as results have exceeded expectations and more and more developers are generating the Genesis block and joining the network,” Tual said. “Real time statistics on the network health can be viewed at http://ift.tt/1G8ygzy ”

“So far the Frontier launch has been exceptionally smooth, due in large part to our intense Olympic test phase, as well as our robust user-guides and the tutorials written by dedicated members of our community,” Ethan Wilding, resident Ethereum philosopher and co-founder of Ledger Labs told Bitcoin Magazine. “This is, however, a development release, and so a willingness to use the command line is required.”

“Most of the questions we’ve had since this launch are from general users eager to learn how to mine ether and get wallet access on the Ethereum platform using command line; we’re always happy to help,” he said. “As our platform is tested further and made even more robust, we will continue to improve upon the user-experience by introducing our graphical user-interfaces for such operations in a future release.”

Bitcoin Magazine will continue to follow this story and keep you informed on new developments.

In today's podcast you'll hear the Blockchain Tech panel from the State Of Digital Money conference, which took place earlier this year in Los Angeles. I thought it was a very fun panel that was filled with many insights. You might say the panel was stacked a bit on the side of blockchain tech over Bitcoin, and Bitcoin maximalists (amongst others) may not agree with some of the points made. But hopefully everyone can still appreciate hearing ideas and discussion from very bright people in the field.

Some interesting tidbits: It's Jeff Garzik you'll hear yell 'œnot true' from his seat in the audience, and Connie Gallippi also speaks from the crowd. I was surprised to learn the source of inspiration for Medici (the blockchain-based stock exchange being pioneered by Overstock CEO Patrick Byrne).

On the panel, you'll hear (in order of appearance):

Moderator:Alex RozmanSenior Manager in the Deloitte Transactions and Business Analytics LLP
@rozman7

MAGIC WORD

Listen for the magic word, and submit it to your LetsTalkBitcoin.com account to claim a share of this week's distribution of LTBcoin. Listeners now have a full week from the release date to claim a magic word. The magic word for this episode must be submitted by 4:00am Pacific Time on August 7, 2015.

SPONSOR

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MUSIC

All music in this episode was created by me, or with friends and family. Ganesh Painting Company is the name of one of the jam bands I feature live recordings of regularly. Some of the musicians you're hearing are Mike Coleman and Steve Lunn. Feel free to contact me if you want more info about any music you hear on the podcast.

The National Science Foundation has awarded research grants on the science and applications of crypto-currency, with approximately $1 million awarded to date. The NSF initiative is part of the “Secure and Trustworthy Cyberspace” program for cybersecurity research and development to minimize the dangers of cyber technology, promote education and training in cybersecurity, establish a science of cybersecurity and convert promising cybersecurity research into practice.

Emin Sirer, an associate professor of computer science at Cornell University, researches operating systems, networking and distributed systems. His current projects involve a novel secure operating system and system infrastructure for high-performance cloud computing applications.

“We plan to investigate the fundamental principles of cryptocurrency protocols, develop programming language support for smart contracts, and open-source secure systems infrastructure for cryptocurrency services, such as exchanges,” Sirer told CoinTelegraph in reference to the NSF grant.

Elaine Shi, an assistant professor of computer science at the University of Maryland Institute for Advanced Computer Studies and the Maryland Cybersecurity Center, and the principal investigator for the largest NSF grant at the University of Maryland, launched the world’s first undergraduate laboratory course that combines “smart” contracts – computer programs that can automatically execute the terms of a contract – and cryptocurrency.

“Smart contracts will shape the future of our financial transactions and e-commerce,” Shi said after the laboratory course. “They carry out high-value financial transactions, so their security is particularly important. We learned many lessons from this lab, including it is very tricky to write a safe cryptocurrency contract.”

“We believe that our research can help establish cryptocurrency as a prominent research area, and make a big impact in shaping the future of financial transactions and e-commerce,” Shi told CoinDesk referring to the NSF grant.

The NSF project wants to establish a rigorous scientific foundation for cryptocurrencies by leveraging cryptography, game theory, programming languages and systems security techniques. Expected outcomes include new cryptocurrency designs with provable security properties, financially enforceable cryptographic protocols whose security properties are backed by enforceable payments in case of a breach, smart contract systems that are easy to program and formally verifiable, as well as high-assurance systems for storing and handling high-value cryptocurrencies and transactions.

This is one of the first large research grants on digital currencies awarded by a government. Earlier this year, the U.K. government launched a new research initiative to bring together the Research Councils, Alan Turing Institute and Digital Catapult with industry in order to address the research opportunities and challenges for digital currency technology, and decided to increase research funding in this area by £10 million ($14.6 million USD).

This is a guest post by Eugene Illovsky, a partner at Morrison & Foerster in Palo Alto. He advises on corporate compliance and represents companies in their interactions with government investigatory, enforcement, and prosecutorial authorities.

What compliance expectations does the Department of Justice have for businesses entering the virtual currency space? How can a company meet those expectations to stay out of trouble with DOJ, or at least mitigate the effects of any criminal inquiry on it as well as its executives, employees and investors? A recent speech by the Criminal Division head, Assistant Attorney General Leslie Caldwell, provides critical guidance on DOJ’s “approach to the emerging virtual currency landscape” and expands on its view that “compliance and cooperation from exchanges, companies and other market actors can ensure that emerging technologies are not misused to fund and facilitate illicit activities.”[1]

DOJ’s View of How Virtual Currencies Are Used

DOJ is skeptical. While it knows virtual currency has “many legitimate actual and potential uses,” its enforcement stance is informed by the observation that “the inherent features of virtual currencies are exactly what make them attractive to criminals.”[2] For instance, virtual currency systems “conduct transfers quickly, securely and with a perceived level of anonymity,” have an “irreversibility of payments made in virtual currency and lack of oversight by a central financial authority” and have the “ability to conduct international peer-to-peer transactions that lack immediately available personally identifiable information.”

Virtual currency thus “facilitates a wide range of traditional criminal activities as well as sophisticated cybercrime schemes.”[3] For instance, “online black markets” on the dark web offer a “wide selection of illicit goods and services” paid for in virtual currency, including “more traditional crimes such as narcotics trafficking, stolen credit card information, and hit-men for hire.” But there has also been “a significant evolution in criminal activity.” Virtual currency has funded “the production of child exploitation material through online crowd-sourcing.” It has been used to “buy and sell lethal toxins over the Internet,” to make payments in “virtual kidnapping and extortion” and to allow “near-instantaneous transactions across the globe between perpetrators of phishing and hacking schemes and their victims.”

Virtual Currency Businesses as Financial System Gatekeepers

DOJ views these issues as a relatively small-scale problem now, because “[f]ew virtual systems currently can accommodate” the sort of “large-scale money laundering schemes involving government-issued currency.” But “as virtual currencies become more mature and better understood by criminals,” DOJ expects “an increase in both individualized criminal activity and large-scale money laundering enterprises.”[4]

This means “companies and individuals operating in the virtual currency ecosystem are at a crossroads.” This is their chance “to help virtual currency emerge from its association with criminal activities.” But in order to “ensure the integrity of this ecosystem and prevent its penetration by crime, the industry must raise the level of its game on the compliance front.”

The government is thus enlisting this emerging business community as financial system gatekeepers. DOJ often notes that the country’s banks “are our first line of defense against fraud, money laundering, terrorism financing and violations of sanctions laws.”[5] It expects nothing less here: “Virtual currency exchangers and other marketplace actors comprise the front line of defense against money laundering and financial crime.”[6]

And DOJ is not kidding. AAG Caldwell bluntly says, “industry participants are now on notice that criminals … make regular use of” virtual currencies. Robust compliance programs in virtual currency businesses are thus “essential to keeping crime out of our financial system.” At a minimum, raising “the level of its game” will require the industry to exhibit “strict compliance with money services business regulations and anti-money laundering statutes.”

The Costs of Compliance—and of Noncompliance

DOJ expects virtual currency businesses “to take compliance risk as seriously as they take other business risk.” And they must think about compliance broadly. On other occasions, AAG Caldwell has noted that compliance efforts “are too often behind the curve” and fail to “prevent tomorrow’s scandals” because they “target the risk of regulatory or law enforcement exposure of institutional and employee misconduct, rather than the risk of the misconduct itself.”[7] DOJ wants the focus to be on the broader “compliance risk” and not the narrower regulatory risk.

What about the cost? DOJ “recognize[s] that new entrants in emerging fields may find that compliance requires a significant expenditure of resources” and promises to be “context‑specific” in analyzing the adequacy of compliance frameworks.[8] Nevertheless, “a real commitment to compliance is a must, particularly given the significant risks in the virtual currency market.” The bottom line: “In the long run, investment in effective compliance programs will be well worth it, especially in the event a company has to interact with law enforcement.”

That “interaction” with law enforcement may well involve DOJ deciding whether to indict a company (and individuals) or give it some kind of break. As AAG Caldwell says, “[i]f a money services business finds itself subject to a criminal investigation,” DOJ will look to the so-called Filip factors in its Principles of Prosecution of Business Organizations. In particular, it will examine “the existence of an effective and well-designed compliance program” (Filip factor 5) and “a company’s remedial actions, including steps to improve upon an existing compliance program” (Filip factor 6).

As for Filip factor 5, “effective anti-money laundering and other compliance programs must be tailored to meet the circumstances, size, structure and risks encountered” by the business. For instance, “virtual currencies, with their perceived anonymity, pose risks that money transmitters such as Western Union do not face.” The risks in the virtual currency arena may be difficult to deal with, but DOJ’s view is simple: “Industry participants must address those risks, even when it may be costly to do so.” Filip factor 6 requires that a company fix a problem if one occurs. That means not only that it must patch any hole in the compliance program, but also “replace responsible management,” “discipline or terminate wrongdoers,” “pay restitution,” and “cooperate with the relevant government agencies.”[9]

Recommendations

Here are some specific steps for emerging virtual currency businesses to consider when ensuring their compliance efforts align with DOJ’s guidance and expectations:

It’s Never Too Early. Anticipate compliance issues as soon as possible in the company’s lifecycle. Develop a compliance system at the same time that you are refining your product or service (and well before you interact with customers).

People, People, People. It’s hard to understand cryptocurrencies, and even harder to explain them well to skeptical law enforcement personnel. Make excellent compliance people part of your initial team and include them in important decision-making.

Money, Money, Money. There must be the financial commitment to compliance that is required in this industry space. While DOJ seems sympathetic to the “significant expenditure of resources,” it will not likely go easy on those whom it concludes have skimped.

Think About the Technology’s Regulatory Future. The technology of, and related to, your virtual currency will shape the government’s expectations. Take bitcoin for example. Unlike dollar bills, say, every bitcoin carries its own transaction history. The blockchain is a public ledger of all bitcoin transactions. And new products are being refined that can analyze that blockchain and seek to determine every place a bitcoin has been and perhaps even who transferred or held it. It may become possible to give bitcoin a risk score, since those of suspicious provenance (for instance, those having once been through a mixer or in a dark wallet) could be separated from those that are squeaky clean.

Instill a High-Integrity Culture Now for the Company You Will Become. The government has high expectations for those it views as running “gatekeeper” businesses. The regulatory bar is bound to get even higher as large banks and financial institutions — with their established and highly professional compliance staffs — develop their own virtual currencies. As “gatekeeper” businesses grow, they face pressures to be “ethical” and not simply to meet legal and regulatory minimums. Adopt a broad view of compliance risk that focuses on the risk of misconduct and on reputational risk and then communicate that view clearly and compellingly in the onboarding process.

Conclusion

Emerging virtual currency businesses will face progressively higher compliance expectations from DOJ. They can maximize their potential market value by acting early in their lifecycles to install compliance systems and instill a high-integrity culture that will enable them to meet those expectations.

[1] Assistant Attorney General Leslie R. Caldwell Delivers Remarks at the ABA’s National Institute on Bitcoin and Other Digital Currencies in Washington D.C. on June 26, 2015 (“June 26 speech”).

[5] Assistant Attorney General Leslie R. Caldwell Speaks at Treasury Roundtable on Financial Access for Money Service Businesses in Washington D.C. on January 13, 2015 (“[f]inancial institutions that have money services businesses as customers have a particular responsibility to be attuned to the risks involved and not turn a blind eye to suspicious conduct”).

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Bitcoin Press Release: US Based HashingSpace Corporation Announced it has been uplifted to a higher reporting status on the OTC Market. HashingSpace will now be listed as OTCQB: HSHS. HashingSpace provides scalable datacenter and technology infrastructure for the global adoption of Bitcoin including Bitcoin ATMs and hosted ASIC mining.

WENATCHEE, WA / July 29, 2015 / HashingSpace Corporation (OTCQB: HSHS), a company focused on the global adoption of Bitcoin, announced today that it has officially been uplifted to a higher reporting status. HashingSpace will no longer be listed on the Pink Sheets and has been moved to OTCQB status.

HashingSpace Corporation submitted all the mandatory documents and has successfully met all of the initial requirements to receive this upgrade. The upgrade became official on July 23, 2015.

“We are pleased to learn that we have been upgraded to a higher status,” stated Terry Taylor, Chief Financial Officer of HashingSpace. “This upgrade reflects on our plan to bring better value to our shareholders. This shows that we are current in our SEC compliance reporting and will undergo an annual verification and certification process. Providing accurate information to our investors is a top priority.”

Included in our new OTCQB designation will be real-time level 2 quote display. Quotes can be found at www.otcmarkets.com

Weekly OTC Market Reports summarizing the activity in our security will be available.

All company information, including stock trading, filings, and market data related to the company, is reported under the new upgrade, OTCQB: HSHS.

HashingSpace Corporation’s business will provide a wide range of services to include:

HashingSpace Corporation is a Bitcoin ASIC mining company, hosting provider, and service provider of blockchain transactional services. HashingSpace’s high density datacenters are designed to meet the demanding power and cooling needs of client hosted Bitcoin mining gear with unparalleled pricing, cooling and green energy. The Corporation is continuing to expand its datacenters to satisfy the shortage of low cost hosting facilities catering to the Bitcoin and blockchain mining and transactional verification services industry specifically.

HashingSpace Corporation manages HashWallet, a Bitcoin wallet; HashPool, a Bitcoin
mining pool; and HashATM, the owner and operator of Bitcoin ATM machines. The company is a wholesaler of Bitcoin mining servers and Bitcoin ATM machines. Bitcoin businesses interested in reselling HashingSpace products and services are invited to reach out to HashingSpace Corporation for more information.

HashingSpace Corporation is headquartered in Wenatchee, Washington. For more information, visitwww.hashingspace.com.

Any unreleased services or features referenced in this or other press releases or public statements may not be currently available and may not be delivered on time or at all. Customers who purchase HashingSpace services should make their purchase decisions based upon features currently available. For more information please visit http://ift.tt/1Bkk5H0 or call 1-855-HASHING (427-4464).
Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the Company’s current plans and expectations, as well as future results of operations and financial condition. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This press release is for informational purposes only. The information does not constitute investment advice or an endorsement by Bitcoin Magazine or BTC Media, LLC. Bitcoin Magazine does not certify the accuracy of the above information provided by HashingSpace Corporation.